Connect with us

Subscribe for latest updates

Is Shark Tank a Scam? I’m Starting to Wonder

by Darwin on May 2, 2012

I first tuned into Shark Tank at the end of last season and it instantly become one of my favorite shows. I loved the business ideas, the pitches, and of course, the wheeling and dealing from “the Sharks”. It was both entertaining and somewhat educational from a business savvy standpoint. However, as the episodes progressed and I started talking to some other people, I’ve started to wonder if Shark Tank is a scam.

Many “Deals” Are Never Consummated – This is the most appalling part of the show in my opinion. I was initially a little suspicious when I would visit some of the company websites where “deals” were struck during the show only to find no mention of a partnership or investment from any of the Sharks on the show. I figured surely these segments were filmed months in advance, so it would seem logical that by the time the show aired, there would be mention of a deal in the “About Us” or “Investors” sections on company websites. But more recently, I was talking to a friend of ours who is an angel investor. He’s often doing this sort of thing for real, where entrepreneurs pitch their business, deals get done, etc. He said it was his opinion that the thing’s a total farce. Anecdotally (and this is his experience, not mine), he said two of the companies that pitched to him made it on to Shark Tank and struck deals and neither ended up going through. He concurred with my hunch that many deals that are agreed on the show never actually happen. He said in one company’s case, the Shark never even called them after the segment! They were waiting around for a call and it never came. That’s crazy! I could understand that perhaps some deals don’t happen because of some critical flaw discovered during due diligence, but to not even call? I wonder if there’s a statistic out there somewhere showing the actual percentage of deals consummated vs. claimed “deals” on the show.

Contestants Clearly for Entertainment, Not Real Businesses – Some of the contestants clearly don’t belong on the show and seem to be there more for entertainment purposes than for an actual business deal. I guess this is kind of like American Idol letting the really bad singer on as a joke or whatever, but in one example, this guy was completely pitching a scam energy bracelet thing which anyone with the slightest analytical ability would realize is purely a scam, yet the producers let this guy on. Mark rightfully called it out as a scam, but why did they even waste viewers’ time with that one?

No Rules – I find the utter lack of rules on decision making and deal-making to be relatively annoying as well. I’ve seen some segments where a Shark says they’re out, then they come back in. WTF is that? Then on other occasions, a shark says they must decide immediately, within the next 5 seconds and then another shark yells out an offer and it goes to a commercial. Then the entrepreneur gets to hear the pitch from the other shark. On a recent episode with some wine in a glass company, Mark was about to do a deal and then withdrew his offer because the guy waited too long to decide (even thought he threw out no time limit and just pulled back his offer). The only logical conclusion I can draw from such cavalier and random offers and withdrawals is that perhaps none of the sharks are serious most of the time.

I’m starting to wonder if the show’s nothing more than a crappy reality TV show. If you were a shark and didn’t really plan on doing deals anyway but just wanted to make for some good entertainment, you could undertake all kinds of antics with no risk to yourself. It would be for great television but not be authentic. Is this really just a showcase for the Sharks to get publicity for their brands and the contestants to get on television so they can attract customers and investor attention after the show airs? Is that what’s going on here?

I watch the Canadian version, Dragon’s Den, and they have given insight as to why some of the deals don’t go through. In the 30 minutes they have for a pitch, the Dragons (or Sharks) ask all sorts of questions, and receive all types of different answers, from specific “I have secured x number of orders”, to more vague “I am close to receiving orders from x”.

The deals get lost in the due diligence that takes place afterwards where lawyers and the investors get a chance to look into the books.

Regardless if the deal gets through or not, the benefit to the start-up business is huge, since they are exposing their product and idea to a national audience and can often secure orders from the Home Depots and Walmarts of the world.

Many if not all reality shows are more just for entertainment. They are more scripted than we realize. At the very least, it is edited and presents whatever the producers want to show to be entertaining. You cannot fault that, because they purpose is to get better ratings. Maybe they should not present it as reality because we presume it is real.

Calling the show a scam based on a blogger named Darwin reveals your critical lack of discernment and your immaturity. Darwin is speculating in a nonsensical ramble without hard data. Both of you, please stop commenting.

I’ve never seen Shark Tank, and it doesn’t sound like I’m missing out on anything, either.

For a number of reasons (mostly to reduce tube time issues with my 13 yo son & Fox Soccer Channel-addicted husband) we canceled Cable TV service two years ago, and we didn’t even hook up a TV antenna, either (too much hassle). The $$$avings has been nice, too.

We “get by” nicely with Netflix Instant Play and a 2 dvd unlimited plan, an internet-connected DVD player, and $8/mo Hulu+ plan (which I’m contemplating canceling, because we hardly ever watch anything on it). The only show I miss watching on our TV is PBS Masterpiece – but we can watch that at our leisure on the desktop computer monitor in the study, though we don’t have a comfy sofa to sit on in there. Hard life, eh?

I enjoy the show, mainly for what I can learn about small business success. It is, like you say, mainly for entertainment. Mark Cuban recently wrote a post on his blog about how the show works behind the scenes, but he didn’t address what happens after (I don’t think).

I wouldn’t go so far as to say its a scam. Sure, there is a contestant or two who is obviously on there purely for entertainment, its to be expected with any TV show. They say on the show no deals are official until due diligence is performed after the fact. I’d be willing to bet whomever didn’t even get called is an exception to the rule.

Plenty of businesses do benefit from deals made on the show. A good example would be the people from Lollacup, who appeared on the most recent episode. Their partnership is front and center on the website & they even wrote a blog about how it has helped them.

Great observations. I think the most annoying one is the lack of rules. In a sea of reality shows (no pun intended), it should be refreshing to find one with real implications and prospects, rather than just seeming for entertainment purposes. However, when they don’t have any strict rules or change them arbitrarily, you can tell it’s not that serious. Probably mostly a scam, with a dash of truth thrown in.

It’s the due diligence after the show that sink a lot of the deals, I believe. I’ve talked to one of the owners who got a deal. She’s being promoted heavily by the Shark go struck a deal with her. To be fair, her business was the only legitimate one that I would even consider in the entire season.

It’s reality TV. They script & chose for entertainment purposes. Real businesses that make money would bore people to death esp when you talk details.

I’m watching it now. It’s a lot of fun. It’s too bad some deals didn’t work out. Maybe they changed their mind after thinking about it? The sharks are the one with money so they can do whatever they want.

What irks me is that as an initial watcher, I was under the impression when they strike a “deal” it actually goes through – or is likely to go through if what the entrepreneurs relayed is accurate. It seems as though very few deals are actually consummated.

I call BS on this blog. I love the shark tank/ dragon den. Sure not every deal goes through but more deals have and its all disclose what happen to the deal on shark tank web site at abc.com 😛 For the record more deal fall through on dragon den UK then shark tank and dragon den Canada. You can see all the product and official websites on the show recap on the official web site! You just didnt research yourself so i call you the scam^^

35% fall through approx. There are outs for the people pitching and the Sharks due dilligence and sellers remorse have outs to a deal. If you were buying a business for $150,000 for 30% would you want to verify what you are being told is true, sales , Profit margins, patents, stores selling it? Accountants and lawyers will always be involved when your talking 5-7 figure deals not a scam smart business decisions on both sides…

I have to agree with itsmekubin. This was a poorly researched blog post. It took me all of one minute to find additional information about the deals on ABC’s website.

To address your three points:
1) The fact that some of these deals never occur is only proof that the entrepreneurs/investors live in the real world. Any successful investor knows that you don’t jump into a business relationship without doing your due diligence.

2) Of the four entrepreneurs that are shown on each episode, I would say that at the very most, one of them is on for “entertainment” purposes. In my opinion, people with bad products or poorly thought out business plans aren’t interesting and aren’t what people are drawn to on the show.

3) No rules? Really? In what world are there rules to negotiations? As with any negotiation, no deal is done until both parties sign on the dotted line.

More than anything, I’m skeptical of the author’s claim that Shark Tank had “instantly become one of [his] favorite shows”. If the author actually watched the show, he would have seen the follow-ups and entrepreneur testimonials that appear on every episode.

To address your 3 points.
1 – I would be fine if a select few deals were cancelled because the business owners misrepresented their businesses or some other anomaly. This appears to be more the norm than the exception. Do you have data to prove otherwise?

2 – You just admitted 1/4 are purely for entertainment purposes. So, right there, scam – and a waste of the viewing public’s time.

3 – I negotiated multi-million dollar commercial deals for years. Yes, there are rules in law, negotiations and business. However, what I’m referring to is the rules of the show. Don’t reality shows generally have rules? You can do X, but you can’t do Y. You get Z amount of time to present, the sharks can do A,B,C. There are some assumed rules that apply some of the time, but then on a particular segment, they go out the window and the sharks do whatever the hell they want.

Finally, you’re skeptical because of some cherry-picked testimonials? That’s propaganda 101 dude. Of course they’re going to highlight the success stories! Where’s the segment showing when the shark strikes a “deal” on the show and then never even calls the contestant after the show? Where’s that segment?

1) Let me get this straight. You put together an entire blog post base on pure conjecture, provide ZERO evidence to support your statements other than a friend of a friend told you so, and now you are asking me to prove that statements you are making are wrong. Sorry, but I’m not the one throwing around words like “scam” and “farce.” The burden of proof is on you.

2) You can’t be serious? First of all, I specifically said “at the very most” one entrepreneur per show is on for entertainment purposes. I was giving your (unsupported) statements the benefit of the doubt. In general, I would say that most shows have zero entrepreneurs that fall into this category.

But that’s beside the point. The fact that any show may include a small percentage of anything specifically intended for entertainment purposes does not somehow make it a scam. To use your example, does the fact that American Idol includes a mix of talented and untalented contestants make it a scam? Not a chance! They are just trying to make the process of finding talented singers a little more entertaining for the viewing public. As someone stated earlier, a typical business negotiation without any entertainment factors would put people to sleep.

3) The premise of the show is, not surprisingly, that it’s a shark tank. In other words, there are no rules. The sharks are looking to make a deal that’s best for them. Conversely, entrepreneurs are looking to make a deal that’s best for them. That’s part of what makes the show interesting. It’s also what makes the show real. Setting up arbitrary rules for the sake of television (as you seem to want) would only make it less reflective of a real negotiation.

As far as actual rules go, here’s some language from the Shark Tank contracts I was able to find:

“It is customary for parties to a business transaction to conduct due diligence as to the suitability and viability of the transaction and, accordingly, it is possible that no definitive agreement may be reached.”

On Hulu, you can see a disclosure statement that reads, “Any on-camera deal is contingent upon appropriate due diligence and the signing of a binding written agreement between the entrepreneur and the Shark(s).”

In other words, it doesn’t matter what happens on the show until further research is done and a contract is signed. The entrepreneur and shark alike can back out at any time. Those are the rules.

4) I am skeptical because ABC provides proof that some of these deals go through, whether or not they are cherry-picked. That, in and of itself, proves that the show is not a scam. Deals are getting done. In addition, ABC provides a summary of each pitch and a link to the company’s website. Most of these companies, whether or not they struck a deal, show the Shark Tank logo on their homepages. I suspect that they wouldn’t be so willing to promote the show if they were somehow scammed or taken advantage of.

The one entrepreneur that I can find that appears to have been treated poorly created You Smell, a luxury soap company. This may be the entrepreneur that you angel investor friend is talking about as lines of communication were cut off after the due diligence had been performed and she was informed that there would be no deal. But even in her case, she still slapped a big Shark Tank on her homepage. Why you ask? Because even those entrepreneurs who don’t reach a deal or who’s deal falls through still get a great deal of publicity from the show. At a minimum, it provides free marketing for all of these companies, whereby other investors may see an opportunity where the sharks didn’t.

The sharks are a bunch of arogant asses. They think if they didn’t think of it it’s not worth it. I wouldn’t ask them for a penny. The shark tank wouldn’t make a pimple on a good banker’s ass. Let me know if anyone finds a good banker. Is that an oximoron?

The Globe and Mail’ Report on Business just did an in depth piece of Kevin O’Leary, who features on both the original Canadian Dragon’s Den and the imported American version of Shark Tank. There too you will read reports of the sharks failing to follow through on offers or even respond to phone calls. O’Leary himself admitted that the only 1/3 deals “close” and only 1/17 is profitable, which illustrates how badly skewed the on-air follow-up is. He compared the latter favourably with the 1/25 success rate in conventional venture capital firms. Details at

You are right when you say many deals that are done on the show do not get completed. Sometimes, it’s a mutual decision between the entrepreneurs and the shark involved in the deal, sometimes the shark pulls out during due diligence. Many deals do get completed however, and some have had remarkable success. Even when a business doesn’t get a deal, the exposure they get is a huge benefit to their business. Take CBS Foods: Shawn :Chef Big Shake” Davis parlayed his “failed” appearance into over $5 million in sales; the Shark Tank gave him marketing clout that big box grocery retailers drooled over- they couldn’t wait to get his product on the shelves. Another recent entrepreneur did a deal with Barbara Corcoran on the air, and didn’t do the deal afterwards. When his segment aired, he did OVER $50K in web sales the night his segment aired (Barbara offered $50K for a 50% share in the business). Granted, there are businesses who don’t belong there and are strictly there for entertainment value, and there are businesses who apply to appear and make it on air for pure PR value, but it IS television after all. One other point: the production company takes an option on EVERY business that appears for 2% of profits for two years following the original air date- so everyone has juice in the deal! If you believe everything you see on TV and take it at face value, you are being scammed by many more shows than Shark Tank!

Ever heard of any of these people besides Mark?
There’s a reason, and it’s because their wealth is grossly exaggerated!
Due diligence… what a sick joke by the sharks and ABC.
They sure didn’t do any confirming the wealth of the sharks.
The two Canadians are nothing more than internet bubble lottery winners who should now be defined as nothing more than media whores.
Claim: Robert Herjavec sold Brak for $100mil to AT&T.
Actual Sale Price: $30.2mil
Claim: Sold second company for $250mil
Actually was nothing more than an employee so received a salary like everyone else.
Shows claims he’s sold $350mil worth of companies.
Actual: $30.2mil.
Here’s a good read about his actual wealth.http://www.thestar.com/business/article/780321–robert-herjavec-the-nice-dragon

I started to suspect that the show was scripted, but after last night’s episode I am fully convinced. A guy turned down a $1 million offer from one of the sharks and the most ridiculous things kept coming out of his mouth. No one could possibly be that stupid; therefore, the show is scripted. The products might be real, but the negotiations taking place are following an imagined and written plot used to boost ratings.

all this proves to me is that the sharks are asses, they sometimes go back in when people are crying or begging for a chance and now i am thinking they just do this type of stuff to try and make themselves look good in the eye of the public.

reality is i watched this show the same reason i watched exteme house makeover edition. i thought it was doing good for people that needed help and i didn’t mind watching every episode. even keep it on if i’m doing stuff on my pc and barely paying attention. but this is not the case from what i’m reading here.

i have totally boycotted the channel spike tv because almost every show that claimed to be real on it is totally fake. i won’t even click to that channel for a movie. and i might consider totally not watching this show any more if the percent rates are this bad.

this show to me is about the people asking for help from people with too much money and time on there hands. don’t put in useless people/ideas that they know are failed ideas then and add more people with strong ideas that really need help. i try not to watch any reality tv for the same reason i hate scripted crap that people try to say is real. all of it on tv is fake as turds in a magic shop.

oh also they say that they still charge every single person that goes on that show 2% of there company weather they make a deal or not.its in small writing at end of show and in the paperwork they sign. so every person going in is praying for it to be worth it. that is more to say on how the sharks have them over a barrel. not calling them the show still makes 2% of the suckers that are supposedly for entertainment purposes only.

The only scam is that they are all working together. They work together to make the best deal, doesn’t matter which shark actually makes it. They’re all in the money. All of the fighting over deals is just to make you think otherwise.

This must be a joke. The sharks are agreeing based on a vocal pitch. Would you give some one a check based on that? They need to perform due diligence. They need to go through bank accounts, BOD guidelines, company contracts. This is a stupid question. Any one could get millions of dollars for a lie if that were the case.

You don’t think the producers vet the companies first? If not, then the show is even worse off than I portrayed. Also, how do you explain a shark not even calling the company at all after they forged a deal on the show?

Obviously the Sharks are rich people, and they can do whatever they want, so the suspicion they are just promoting themselves is not news to anybody.

As for the crappy brands they turn down, there’s nothing in it for the show to promote them, these people are losers without money, literally. It’s most likely that’s the best examples they can find. Some are very good, but an ocean of them are laughing stock, and they still had to pick out a few at least viable, just not profitable ones for the show.

The deal/no deal part is somewhat dramatized, wouldn’t surprise me if they either agreed in advance, or edited out some discussion scenarios. But as Mark Cuban said on reddit AMA (ask me anything) MANY of them don’t get their funding after due diligence. Because they might’ve left out some bad news. If you can’t convince a shark on the spot, you’re out, period. But if you CAN, you still have a way to prove yourself.

Well here’s 1 theory, Say you have 100+ million dollars someone gives you there sales pitch, based off that sales pitch you strike a verbal deal. After you throw number’s around, when it comes down to write the check and sign a contract you have a lawyer take a look there business which show’s the person giving the sales pitch was full of BS. Why would a smart successful businessman throw his money away, can you really blame them? What Im curious about, has anyone added up how much money they have “dished out” for the show?

yeah exactly this! I used to wonder, what if the pitcher’s are lying about profit?
Of course the follow-up check would find out. Now if they were UNDER-exagerrating, then that sucks for them because its still the same deal they struck, so technically more money for the sharks then they were expecting.

And I have the answer: well at the beginning of shark tank season 5 ep 1 (I think) it said they paid 23 mil so far? which sounded actually kinda small compared to waht ive seen, (maybe) but idk i also watched dragons den so maybe im confusing it with that. but hence, that was begining of season 5.

Darwin,
Imagine how many companies and people apply to be on the show. Do you really think they are going to spend the resources to do that? lol Just be somewhat happy there’s a couple shows still on american TV that consist of somewhat business tactics not fart jokes & ghetto girls slapping each other

You can find several season of similar show from Canada on You Tube. It is called the Dragons Den instead of the Shark Tank and they go into much more detail about the deals. We get to learn how they happen and which ones did and didn’t work on the update shows. I wish the Shark Tank would devote full episodes to updates instead of just a few minutes per episode.

I’m looking for investors and when I mentioned it to an acquaintance he suggested the Shark Tank. Last week I watched the show for the first time and I can still smell the odor. Regardless of what you have to offer, to be selected for the show you have to get enough friends and relatives to vote for you, it’s a popularity contest.

After several months of researching products with appeal to an existing 150 billion dollar market and the design of a dynamic new marketing program I know beyond any reasonable doubt that I’m sitting on a multi million dollar powder keg. Without the necessary funding it’s only pie in the sky and I would rather go to my grave with it than prostitute myself on the Shark Tank. The only sharks I’m interested in are the ones I can slice into steaks.

Does anyone have any suggestions as to how I can get my promotional info in the hands of legitimate investors?

I think the show is real. BUT, I also think most deals fall through because the presenters lie about their numbers, and or the Shark sees that they cannot work with the individual or the patent doesn’t exist so the deal is off. If they REALLY are legit, the deal works and I followed up with a few products like the luggage that has a seat for the kids or game face and theyre making a killing. BUT , BUT , BUT , heres where I wonder , If Kevin O’Leary for example has accepted over 100 deals , how the heck can he manage them? Yes he has his “Board of Directors” But we only have 14 hours per day to live and its physically IMPOSSIBLE for him to run a 100 business at once. So for that I Say 9 out of 10 accepted deals are thrown into the garbage.

I googled to see if there was anything information about there about the deals or participants that could be worrisome. I found this site and as a Mom of a 14 year old wanting to try out for Shark Tank I only see at worst an opportunity to pitch a product you have. I see as families sitting around a TV on a Friday night judging who they think has the best most useful product. whether it is real or fake doesn’t matter we are entertained.

Everyone says my daughter as a perfect pitch to Shark Tank and as a Mom I think that would be great but I don’t want her taken advantage of either. She is doing a video this weekend to send so I will update you if chosen and the outcome. It may be for all show I just don’t want to lose any part of her company in exchange for being on the show. That is where I worry. Yes you can be a part of the show but will owe us 10% for a hundred years for our invitation. Yikes…that would be a scam.

The most pathetic part of the show is the idea that products are invented from people that basically have no background in design or production…it means that the market should be fill with stupid basic pour products created from anyone… cost 9.99 or 19.99 and 29.99 and it should be the reason why you buy it….

This is crap… the worse message society can get…how about focusing on culture and intelligence instead to promote an ignorant society ( unhappy like all the entrepreneurs that in the show prove an horrifying lifestyle made of struggling and blind ambition to pay impossible bills ). What model is it? Something to be pride of? That is the description of hell on heart not the american dream… who dream to work like a donkey to sell a stupid toilette brush ( just to make money and pay impossible bills ) .